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Salesforce.com, SAP Highlight Growing CRM Battle

Salesforce.com, SAP, Oracle and Microsoft are all focused on developing their CRM platforms to take advantage of a growing market that embraces social networking.

Salesforce.com unveiled its Service Cloud 3 March 3, giving businesses the ability to analyze and respond to customer feedback filtering from Websites such as Twitter and Facebook. It represents the next stage in Salesforce's quest to leverage social networking for the benefit of its cloud-based CRM (customer relationship management) platform, and the latest twist in the company's competition against not only Oracle, but also SAP and Microsoft.

All of those companies are seeking to profit from businesses' increased interest in CRM and its ability to not only make their customer service more efficient, but also blunt the occasional public relations snafu.

"There is strong corporate awareness, including at corporate executive levels, of social networks and their potential impact on corporate brand management and customer service perception," Drew Kraus, a research vice president at Gartner, wrote in a March 3 research note. "We expect the high-profile nature of social networks and social CRM for customer service to rapidly advance adoption from early adopter to mainstream deployments despite the volatile and rapid evolution of social networks in general."

For the Salesforces, Oracles, Microsofts and SAPs of the world, that translates into a constant push to add new features and functionality, giving their respective CRM platforms an edge-however temporary-over their rivals.

Further reading

Service Cloud 3, for example, lets employees click on a dashboard tab labeled "Social Conversations" and see whatever customers are posting on Twitter or Facebook. Those employees can also monitor broader swaths of social-networking data, via dashboard metrics such as "Twitter Volume by Product" or "Cases by Channel."

Service Cloud 3 users can escalate a customer's case for their colleagues' attention, and post a solution to a particular issue on a Facebook wall or Twitter. For Salesforce, such features represent the latest in a long line of social-networking-centric features. In late 2009, the company unveiled Salesforce.com for Twitter, which gave customer service personnel the ability to monitor public conversations about a product. A little less than a year later, the company introduced Chatter 2, which allows employees to post comments and share files in a Facebook-style environment.

"We're standing on the shoulders of these consumer giants," Salesforce CEO Marc Benioff told the audience during a March 3 event in New York City, referring to Facebook and similar companies.

Salesforce has been locked in particularly vicious battle with Microsoft, which in December 2010 posted "An Open Letter to Salesforce.com Customers" dangling a $200-per-user rebate for any organization that switched to them from Salesforce. In 2010, the two companies hurled IP-infringement suits at each other, a situation that resolved in August with Salesforce agreeing to compensate Microsoft for its patents.

Microsoft's own CRM efforts center on Microsoft Dynamics CRM 2011, which emphasizes the ability to leverage real-time data and streamlined analysis. In a bid to differentiate itself from Salesforce and Oracle, Microsoft is claiming that customers who embrace its cloud CRM offering will have the advantage of leveraging other Microsoft software, such as Windows Azure and SharePoint, into the platform's use.

Microsoft is also "all in" with regard to its cloud strategy. "We have learned a lot through running Windows Live, Hotmail, Bing," Microsoft CEO Steve Ballmer told an audience during his July 12, 2010, keynote address at last summer's Worldwide Partner Conference. "These are some of the highest volume services run on the Internet today. When you run a highly scaled, highly dynamic service, you need a whole new approach to running a data center."

It remains an open question, though, whether integration with Microsoft's other software offerings, combined with its wholehearted embrace of cloud religion, will sway customers who may be considering Salesforce's consumer-style platform or Oracle's integrated hardware-and-software stack.

These tech giants' focus on CRM comes just as SAP preps its own latest offering for the segment, a collaborative CRM platform targeted mostly towards sales teams, with inevitable emphasis on features such as analytics and knowledge base. The latest tweaks to SAP's business intelligence and enterprise information-management solutions also allow users to monitor Tweets in real-time, and extract more information from those Tweets and their creators, presumably for later data-mining.

"Being able to engage people, and react instantly to a problem or opportunity, is what we're here to talk about," Steve Lucas, SAP's general manager and global head of business analytics, told an audience of media, customers and analysts gathered in a Times Square hotel Feb. 23. "You want information now, immediately, as it happens."

That need to drill into social networks' rich vein of information is driving companies to adopt these new CRM platforms at an incredible pace.

"In 2010, only 5 percent of organizations took advantage of social/collaborative customer action to improve service processes; however, customer demand and heightened business awareness is making this a top issue among customer service managers," Gartner's Krause wrote in that same March 3 research note. "At current trajectories, within five years we expect that community peer-to-peer support projects will supplement or replace Tier 1 contact center support in more than 40 percent of top 1,000 companies with a contact center."

For those customer companies, a CRM tapped into a social network is a tool for reacting far more quickly to issues that have the potential to go nuclear. In presentation after presentation, executives from companies like Salesforce and Microsoft like to emphasize how one particularly creative Tweet or YouTube video, designed to savage a company's performance or product, can translate within hours into a very expensive and public disaster. A CRM that allows customer service personnel to react to these issues in a nascent stage, these executives argue, is a cost- and reputation-saver-and a competitive advantage over companies without such a platform installed.

That being said, and despite the hype, the tech giants' radically different approaches to this "new" CRM suggests a consistent or dominant model is far from being established. "The lack of broad-scale adoption of the technology makes the business case more theoretical than proven," added the Gartner research note. "This has the effect of slowing adoption by mainstream and late adopters who traditionally look for proven technologies and shy away from those perceived as -bleeding edge.'"

But the bleeding edge is precisely where companies such as Salesforce and Microsoft want to be-in order to take advantage of that client who, walloped by a particularly damaging Tweet or YouTube video, feels the need to become more responsive. And given the sheer amount of marketing and development dollars these companies have devoted to their CRM offerings, trust that none of them will back down anytime soon.

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